I recently received an email with an article that you may find interesting. From investorsinsight.com comes this, “Spain: The Hole In Europe’s Balance Sheet “. It makes for a depressing read, but much of it makes very good sense:
“We believe that Spain is a disaster waiting to happen [and] is set for a long, painful deflation that will manifest itself via a very high unemployment level for an industrialized economy, a real estate collapse and general banking insolvencies… Spain had the mother of all housing bubbles. To put things in perspective, Spain now has as many unsold homes as the US, even though the US is about six times bigger. Spain is roughly 10% of the EU GDP, yet it accounted for 30% of all new homes built since 2000 in the EU. Most of the new homes were financed with capital from abroad, so Spain’s housing crisis is closely tied in with a financing crisis… Spanish banks, in our view, are now facing a very bleak outlook. Spain’s unemployment rate reached over 17%; there are now four million unemployed Spaniards and over one million families with not a single person employed in the family. “
Notes from Spain by Ben Curtis 